St James’s Place chief executive David Bellamy says the company’s RDR charging structure is competitive and “by far not the most expensive” on a total cost comparison basis.
SJP set out its post-RDR charging structure last month, which will see clients charged an initial fee of 4.5 per cent for bonds and 5 per cent for unit trusts, for advice and fund management, with an ongoing charge of between 2.1 and 2.3 per cent. SJP partners will receive 3 per cent from the initial charge and 0.5 per cent ongoing.
Bellamy says: “We are not the cheapest but by far not the most expensive. I think we provide exceptional value given what we do. Our scale helps us enormously but I certainly do not see we are in a bad position when it comes to price competition.”
Bellamy says SJP has been “very explicit on total costs” and based on its own cost comparisons the charges are “not at all expensive”.
SJP saw a jump in new business levels of 46 per cent in the last three months of 2012 to £223.8m compared with £152.8m for the same period in 2011.
Bellamy rejects the idea this surge in new business stems from advisers looking to secure as much business as possible in the run-up to the RDR in order to benefit from past trail commission rules.
He says: “We are not about selling products, we build long-term relationships and look after people’s money.”
Page Russell director Tim Page says: “We would be uncomfortable levying those kind of charges when the expectations on returns are relatively low. In my view this charging structure is stretching the bounds of what is appropriate.”